November 10, 2010

Waste Land

This year, the United States will spend at least $700 billion on defense and security. Adjusting for inflation, that’s more than America has spent on defense in any year since World War II—more than during the Korean war, the Vietnam war, or the Reagan military buildup. Much of that enormous sum results from spending increases under presidents George W. Bush and Barack Obama. Since 2001, military and security expenditures have soared by 119 percent.

For most of that time, of course, the United States has been fighting two wars. Yet that’s not the cause of the defense-spending explosion. Even if the costs of the conflicts in Iraq and Afghanistan are subtracted, the defense budget has swelled by 68 percent since 2001. (All money figures in this article are stated in 2010 dollars.) The U.S. defense budget is now about the same as military spending in all other countries combined.

In a historically unusual twist, Defense Secretary Robert Gates, a Republican appointee and a former CIA director, has repeatedly acknowledged that military costs are untenable and decried the Pentagon’s “culture of endless money.” But despite Gates’s advocacy, and Obama’s backing, not much has changed. Congressional leaders nod in agreement at talk of reform—then demand that their pet projects be fully funded. A recent Gates proposal, received as if it heralded dramatic cuts, seeks merely to constrain Pentagon budget growth to 2 percent to 3 percent over inflation. At that pace, defense and security costs will hit a ruinous $1 trillion annually by 2030.

Pentagon profligacy is not a new phenomenon. But an ugly melee is brewing regarding America’s unsustainable government spending—and defense and security costs cannot be exempted from tough decisions over what the country can and cannot afford. And yet, security spending and military deployment are presented to the nation as virtually untouchable. If the Pentagon wants something, the logic goes, then it must be necessary. This is far from true.

The United States wields more military power relative to other nations than any country has ever known, including Rome at the peak of empire. The vast sums that America spends on defense buy many valuable things: a highly trained and ethical military; sophisticated and wide-ranging counterterrorism efforts; and extensive humanitarian operations, most recently in Haiti, Indonesia, and Pakistan. Furthermore, as Obama noted in a speech at West Point in 2009, the United States does not use its might to acquire territory or seize resources. Instead, the American military pursues what political leaders believe is best for the world. Such beliefs may be wrong, even tragically so. But has any other nation that possessed such overwhelming military force refrained from using it for conquest or pursuit of riches?

That the U.S. military is strong and honorable does not, however, mean the price is justified. Moscow and Washington just shook hands on another nuclear arms reduction agreement. Iran is a cause of enormous stress but does not threaten the United States. China, vaguely a potential adversary, is mainly on good terms with America. In June, I spoke at a flag officers’ forum at the Naval War College in Newport, where Admiral Gary Roughead, the chief of naval operations, explained that naval intelligence believes Beijing’s long-term goal is to avoid war: China is building weapons appropriate to defend its coasts, not to contest the United States in the air or on “the blue water.” Such indicators, combined with the drawdown in Iraq, suggest the defense budget should be falling, not climbing. Instead, most U.S. defense expenditures are on the rise. As Gates has remarked, “It is reasonable to wonder whether the nation is getting a commensurate increase in capability in exchange for these spiraling costs.” This turns out to be a colossal understatement.

One reason spending is soaring is because the United States treats soldiers better than in the past. The largest item in war and security spending, $300 billion, is for pay and benefits. This is a good thing: If Americans want an all-volunteer military that places the entire burden of risk on the small percentage who serve, then society must treat that group well.

As recently as the Vietnam war, conscripts were treated as chattel. Today, the Army enlistment bonus can be as much as $40,000. An Air Force master sergeant with ten years experience earns $42,066, while a major in his tenth year earns $74,761, plus allowances for housing and food. Top officers increasingly have pay stubs suggesting corporate management, with a lieutenant general in his twentieth year earning $159,396. Servicemembers can retire as early as age 40 and draw pensions of $20,000 per year or more—a nice sum for someone positioned to start a new career. And officers’ pensions can be spectacular. Afghanistan commander Stanley McChrystal, cashiered at age 56 for talking to Rolling Stone, will receive an annual pension of $149,700 for life.

Then there is what the Defense Department insists on calling the “death gratuity.” Once, the family of a fallen soldier received funeral expenses and a meticulously folded flag. Today, the family receives a payment of $100,000—much more if the person signed up for the subsidized life insurance offered by all the service branches.

In addition to paying servicemembers decent amounts, the United States now spends more on their living conditions and well-being. All military personnel receive housing benefits, and, for the most part, deployed forces don’t sleep on the ground and eat beans, as did previous generations of soldiers. Barracks equipped with power, showers, and Internet connections are the norm; dozens of military facilities around the world include U.S. chain stores and restaurants. That’s part of the reason that military construction costs have increased over the past decade from about $10 billion annually to $20 billion.

The U.S. military also offers generous educational benefits, including 36 months of tuition payments for active-duty military. We should be glad the defense establishment values education and weighs it heavily in promotion: American and Israeli experience shows that educated militaries are ethical. (Yes, the militaries of both countries have committed crimes, but, in the main, their behavior is exemplary.) Today, when U.S. engineers build an airstrip or port, they may build a university branch, too. At Bagram Airfield in the wilds of Afghanistan, the University of Maryland has a branch right across the parking lot from the Dairy Queen. It’s great that, instead of getting bored or into trouble, personnel at Bagram can use their spare time to work on college credits and then reward themselves with an Earthquake Blizzard. But it’s also expensive.

Like the rest of the country, the Pentagon is also struggling with spiraling health care costs, which have risen from $23 billion in 2000 to $51 billion in 2010. This is in part because servicemembers receive lifetime subsidized care at a family premium of $460 per year—a fraction of the cost of a comparable private plan. There is also a gruesome calculus at work. A soldier who dies in battle costs society less than a soldier who returns disabled, requiring a lifetime of special payments and medical attention—and medical advances and rapid evacuation mean that many servicemembers who would have died in prior conflicts now survive. We send our forces off to fight, and so we must take care of those who return physically or psychologically harmed. Until such time as America may learn to resolve conflicts without infantry, this dynamic will keep adding to military spending.

While some of the causes of rising defense spending are worthy, many are not. The most egregious case is the Pentagon’s legendary procurement screwup. These are partly the result of payoffs and corruption scandals, such as those involving Darleen Druyun, a top Air Force procurement officer, and former California Representative Randy “Duke” Cunningham. But there’s a more insidious atrophy at work. Pressure-point lobbying has made it hard for the Department of Defense to render final acquisition decisions. Instead, programs are perennially “stretched,” becoming more and more expensive while less and less of value is produced.

Exhibit A for this phenomenon is the F-22 fighter jet. Lockheed Martin was chosen as the prime contractor in 1991. But the plane did not become operational for 14 years, as lawmakers scrapped over which congressional districts would receive the subcontracts. While deadlines kept passing, taxpayers paid billions. Through the years of wheel-spinning, F-22 costs more than doubled in inflationadjusted terms per plane. The Air Force’s entire B-58 project—which produced the world’s first long-range supersonic bomber—took six years, from when the prototype first flew in 1956 till the final B-58 left the assembly hangar. Back when Pentagon spending was much lower, there was discipline about completing programs on time.

Eventually, the original justification for the F-22 fighter—anticipated aerial duels above Europe against the Soviet Union’s best—faded away, as did the adversary. When the first operational F-22 finally entered an Air Force squadron in 2005, it was unclear what the plane would do, other than be something really cool for members of Congress to have their pictures taken next to. The F-22 has never been used in Iraq or Afghanistan: Either the plane is irrelevant to low-intensity war, or the Air Force fears one will get shot down by some cheap, old-fashioned weapon. The project was finally ended last year, but only after a nasty and protracted fight in Congress.

This is not an isolated example. Since 2002, the Air Force has been trying to build a new tanker. Many U.S. airborne tankers are based on the old 707 jetliner, which Western airlines stopped using a generation ago. The Air Force selected a Boeing replacement, resulting in a lobbying onslaught from Boeing’s competitors. The Pentagon dropped its plan and chose a Northrop Grumman - Airbus replacement; Boeing staged a counterattack, and now the Air Force is back to debating between Boeing and Airbus. Eight years after the project began, millions of dollars have been wasted while Pentagon personnel, contractors, and lawyers fought about the deal, but nothing new is flying. The kicker? In 2008, Gates ordered an “expedited” decision.

About a decade ago, the Navy identified a need for a relatively inexpensive corvette that could fight in shallow water. The Littoral Combat Ship (LCS) will control West Africa’s coast and assure access to sea lanes. (Military planners hope the United States will wean itself from Persian Gulf oil, which must pass through the perilous Strait of Hormuz, and switch to oil from West Africa, as tankers departing from there sail directly into the open ocean, where the U.S. Navy rules.) In 2004, Lockheed Martin and General Dynamics were funded to build prototypes. Both followed the time-honored procedure of lowballing the cost estimates to get the contract, then running up the price. Six years after the beginning of what was promoted as a quick project, the price per ship has skyrocketed, from perhaps $300 million to perhaps $700 million for each small vessel. The project is so fouled up that Maine’s Bath Iron Works, which is widely viewed as America’s best military shipyard, dropped out.

In 2003, the Defense Department decided to replace the Marine One helicopters that ferry the president, as several of the presidential choppers are based on a design from the 1960s. First, the Pentagon chose a way-too-complex consortium of AgustaWestland, Lockheed Martin, and Bell. Connecticut-based Sikorsky cried bloody murder to its allies in Congress and got the deal blocked. After Obama took office, he theatrically cancelled the project.

But last winter, the initiative came back. “Cancelled” Pentagon projects are more enduring than brooding teen vampires. Lockheed Martin, a lobbying powerhouse, switched sides and joined Sikorsky to offer a different aircraft, while Boeing purchased the rights to the AgustaWestland design that once appeared to win the contract. The two sides are now at each other’s throats on Capitol Hill. Meanwhile, the price of a new Marine One fleet has shot up from $6 billion just a few years ago to $11 billion. (Projects “cancelled” because they’re too costly invariably become even more expensive after being revived.) The Pentagon now says the new presidential aircraft will not be airborne until sometime between 2017 and 2023. Twenty years just to build a helicopter.

Although the Pentagon is “awash in reports” on its broken procurement process—as the military’s own news agency said in August—little meaningful internal reform has occurred. The latest jet fighter costs nine times as much as the top fighter that flew during the Vietnam war. The latest submarines cost $7 billion, the latest aircraft carriers $11 billion. In 2009, the Government Accountability Office estimated that Pentagon weapons projects were collectively $296 billion over budget.

One reason for these astronomical sums is military infighting, with the services often more focused on turf wars than on finding the ideal solutions to security threats. In 2008, Gates fired the top civilian and military leaders of the Air Force in part because of the service’s refusal to focus on close air support for soldiers in Afghanistan, much of which is done by low-speed drones, which bore the Air Force to tears. (The Air Force is much more interested in ultrazoomy piloted planes like the F-22.) The Army does not trust the Air Force, and so has been arguing with the flyboy service for years about who gets a new cargo aircraft. The Marines don’t trust the Army, so they insisted on the expensive V-22 tilt-rotor transport. However, the V-22 has crashed several times and has rarely been used in contested areas of Iraq or Afghanistan. The Marines also want expensive amphibious tanks built exclusively for them, although in the past half-century there have been only a handful of amphibious assaults worldwide. Right now, the Marines are trying to get their tank into “low-rate initial production,” a classification synonymous with runaway cost. (It essentially promises that the high initial price will drop as manufacturing volume increases, but that rarely happens in practice.)

The next big jet fighter project is the F-35, which was sold to the Clinton White House as an affordable alternative to the F-22. Already, the F-35’s sticker price has grown from $65 million per plane, forecast about a decade ago, to $158 million. The F-35 was also supposed to save money because it would be used by the Air Force, Navy, and Marines. However, the Marines wanted their F-35s capable of taking off and landing vertically, so that they can be resupplied on beachheads. Adding the necessary features made the fighter more complex and expensive—though the Air Force and Navy don’t expect to use the F-35 as a “jump jet” and the Marines may not either, except at air shows.

There is a Joint Chiefs of Staff structure that, in theory, should resolve these sorts of squabbles. But the Joint Chiefs are like the board of directors at BP—they rubber-stamp whatever is put in front of them. Each member of the Joint Chiefs is a four-star officer in his final billet, soon to retire and accept a cushy job in private industry. The last thing he wants is to offend a powerful Pentagon interest group.

On Capitol Hill, lawmakers whose states or districts contain military installations or defense contractors have a gentlemen’s agreement not to attack each other’s pie slice: The contractors for mega-projects like the F-35 carefully distribute construction throughout almost every state. The result of this unwritten congressional rule—I won’t challenge your boondoggle if you won’t challenge mine—is that spending for any one military or security category can rise only if all such expenditures rise.

Despite unprecedented spending,U.S. weapons are becoming antiquated. The Air Force consists mainly of aircraft designed 30 or more years ago. The Army’s primary tank, the M-1, went into the field when Jimmy Carter was president. Billions of dollars have been wasted on replacement projects, including a super-costly plan for a swarm of elaborate armored vehicles called Future Combat Systems, but the initiatives failed to produce a substitute. Under current plans, the M-1 will remain the Pentagon’s primary armor until 2050, when the tanks will be 70 years old.

All U.S. bombers are showing age—the final B-52 came off the assembly line the year the Beatles recorded their first single; the unreliable B-1 first took flight when Gerald Ford was president; and the B-2 was in the air before Web browsers existed. The Air Force hoped to field by 2018 a modern bomber engineered for miniature electronics and satellite-guided munitions, but Gates cancelled the project after the costs exceeded the giggle test. The current plan is to rely on the B-2 until at least 2040, when the planes will be 50 years old. And let’s hope no B-2 gets shot down, because, at $2 billion apiece, the bombers are so expensive that the Air Force has only 20. When the project was proposed during the Reagan administration, The Washington Monthly quipped that B-2s would be so few and expensive they would be named after states, like battleships. The B-2s are now named after states.

Paradoxically, though modernization is lagging, parts of the U.S. military and security systems are overbuilt. The Air Force is already stronger than all other air forces, with more advanced fighters and bombers than the rest of the world combined. Gates has estimated that, a decade from now, the United States will possess 20 times as many advanced fighter aircraft as China. Yet the Pentagon is seeking funding for thousands of additional fighters. The Navy has eleven carrier strike groups—each a large nuclear aircraft carrier typically accompanied by guided-missile cruisers and destroyers, plus two nuclear submarines unseen beneath. These strike groups are so powerful that no other nation’s warships could draw within firing distance before being sunk. No other nation will try, because while the United States has eleven nuclear supercarriers, the rest of the world has none.

For centuries, an essential theme of the struggle between great powers was the quest for naval supremacy. That contest has ended with a final score of 11-0, as other nations have ceased even attempting to counter U.S. maritime power. There hasn’t been a significant naval engagement anywhere since 1982, during the Falklands War. Washington’s naval dominance is good for everyone, as liberal international trade is made possible by the American insistence, dating back to Woodrow Wilson, that sea transit be safe and open to any nation. Still, the United States hardly needs eleven carrier strike groups to maintain its edge. Half as many would represent incontestable naval might. Despite this, the Navy wants to expand the U.S. fleet by another 50 ships in the next five years. After all, it gets roughly 30 percent of the military budget and has to spend the money on something.

In August, Gates proposed the elimination of the Joint Forces Command, based in Norfolk, Virginia. The Joint Forces Command is one of the Pentagon’s ten “unified combatant commands”—chances are we will be okay with nine. Opposition to Gates’s plan was immediate and intense. Virginia’s governor created a Monty Python - style Commission on Military and National Security Facilities, whose purpose is to demand that spending rise eternally. Like many parts of the Defense Department, the Joint Forces Command is a cookie jar for politicians. With no fiscal discipline observed in any other aspect of government, why should Virginia’s special deal be disrupted?

Even the officer corps is overbuilt. Today, the United States has more four-star generals and admirals than during the Nixon administration, when there were twice as many active-duty enlisted personnel. This not only means expense but top-heavy chains of command in which multiple layers of brass must sign off on trivia. The ranks of senior contractor personnel are swollen, too. When Gates recently proposed to eliminate 50 flag officer slots, and cut funding for 150 senior-executive contractor positions, there was consternation at the Armed Services Committees on the Hill, where stars and senior-grade jobs are prized political plums to be distributed.

Today, America’s armed forces are almost entirely expeditionary. The United States has about 400,000 active-duty personnel stationed overseas, including around 59,000 in Germany and 33,000 in Japan. Tremendous numbers of U.S. aircraft and tanks sit, with their spare parts and crews, on other continents, along with an entire carrier strike group “forward deployed” in Japan. The United States maintains 652 military bases and similar installations in other nations, plus an ever-changing number in Iraq and Afghanistan. Housing a large force structure on other continents is far more costly than maintaining one stateside. While the Base Realignment and Closure Commission has been engaged in a two-decade tooth-pulling exercise to shut down military installations within the United States, we’ve been opening new ones overseas.

With the cold war long over, why does America need a huge troop presence in Germany, which has been a liberal democracy for 50 years? Why do we still need a huge troop presence in Japan? Forces to counter North Korea are based in South Korea and Guam; if we really think China threatens Japan, then we shouldn’t be cooperating so enthusiastically with China.

The mindset of top-heavy spending has also infiltrated the realm of counterterrorism and intelligence. For security advice, the president now has a secretary of defense, a secretary of state, a director of national intelligence, a national security adviser, a Central Intelligence Agency, a National Security Council, a President’s Intelligence Advisory Board, a National Security Agency, a Defense Intelligence Agency, separate Air Force, Navy, Marine, Army, and even Coast Guard intelligence commands, a National Counterterrorism Center, an FBI Directorate of Intelligence, a State Department Bureau of Intelligence and Research, a National Reconnaissance Office, and a National Geospatial-Intelligence Agency. Even the Treasury Department has an Office of Terrorism and Financial Intelligence.

The specter of terrorism obviously required an improvement in intelligence. But spending for the sake of spending doesn’t make the nation any safer, while multiple overlapping bureaucracies may only slow reaction time. The new security hierarchies are sagging under the weight of senior-grade officials who spend much of their time in turf battles. Recently, the director of national intelligence, Dennis Blair, resigned after just 16 months on the job, after a sandbox squabble with the CIA over whose name comes first on memos. If that’s how people at the top of the security hierarchy are behaving, imagine how those in the middle are wasting the public’s time.

Many of these multiple redundant agencies are in the process of building themselves palaces. The National Geospatial-Intelligence Agency, which takes extremely expensive aerial urban photographs, is raising a $1.8 billion headquarters that will be the third-largest government building in the Washington area. Hiding behind classified status, it is effectively exempt from cost control or public scrutiny. The very day Gates announced an initiative to “reduce excess overhead costs,” it quietly signed contracts to add billions of dollars to long-term defense overhead. The CIA, the National Reconnaissance Office, and the Geospatial-Intelligence Agency all have secret budgets. The budgets are secret because they are what the agencies care most about protecting.

Why is the United States spending $700 billion per year on defense at a time when great-power tensions are low, and no other nation is even attempting to challenge the Pentagon’s supremacy? If U.S. defense and intelligence costs were pared in sensible ways, Washington would still retain a military dominance that no other nation would attempt to challenge.

Why does Washington assume that use of its fantastically capable military will always bring positive results? We keep sending our forces far away to insert themselves into other people’s fights. Because we are the good guys, we can’t face the reality that, most of the time, this doesn’t work. This is no failing of U.S. forces; it is simply the limit of power. Some problems cannot be solved with soldiers and air crew, no matter how well-equipped and skilled they are. And when we choose to deploy forces, vast costs follow: increased military health care expenditures, the long-term financial burden of looking after injured veterans, and the construction and maintenance of expensive bases in war zones. Asking why we are doing this could lead to many constructive reforms.

Yet these questions go unasked, because they are in no one’s interest in institutional Washington. Congress wants to spend money; the Defense Department and its sister organizations in intelligence want to command money; contractors want to receive money. Figuring out cost-effective alternatives is practically unpatriotic.

Institutional Washington tends to assume that exorbitant military spending is “just” waste, as if an enormous squandering of resources is annoying but has no other downside. Of course, no person would assume this about his or her own personal budget. Throughout the last decade, America has diverted a significant amount of its national wealth to defense and security. This year, the United States will spend about $315 billion more on defense and security than it did ten years ago, which equates to about 2 percent of GDP. Subtract over $300 billion annually from federal spending and the national debt becomes much less dire. And when Washington spends recklessly on overpriced weapons systems or unnecessary bureaucracy, the loss isn’t limited to entries on a ledger. That’s money that can’t be invested in preserving the vitality of America that the military is meant to protect.

Gregg Easterbrook is a contributing editor at The New Republic. This article ran in the December 2, 2010, issue of the magazine.